I would be interested in all ideas people have for structures to manage money for others, not just in the U.S. For example: 1) Client opens own account, you manage with power of attorney. You send invoice for fees. 2) Pay lawyers and start a proper fund with offering memorandum etc. 3) any others?
ok - if you charge fees are they tax deductible for the client, as per a fund - where you are taxed on the after fee gains?
NZ - you need to bring a qualified CPA onto your team and they will be able to answer this question. Not only are you going to need help for personal/business issues, but you may end up referring your clients to this person which makes the process much easier for all. Also, make sure you set up the proper business structure. For this, you will need a qualified attorney. At first you will be spending some $$$, but if you are good at what you do, this shouldn't deter you from doing it.
I respect your opinion, but this is certainly not necessary. To create an LLC takes a matter of minutes and can be done online for a couple hundred dollars. And a CPA is by no means necessary. It all boils down to what you are comfortable with and how much homework you're willing to do. You are just as likey to get conflicting info from attorneys and CPA's as not, especially considering this is a specialized business. I personally would rather do my own homework and know I got it right. Attorneys and CPA's are no smarter than me and only I care as much as I do about how it all turns out.
I agree on this one.... if you are managing small money among friends and family, no need for any legal structure really... and I am sure the fees are taxable to you, and tax deductable for your clients. if this is a serious biz, then it makes sense to set up a structure to shield liability (to some extent). I had to set up a S corp last year, and we did most of the legal/tax stuff.... we did hire a CPA to do the initial filing of the S corp, but it would be actually easier to do it on my own. Basically you can't get lazy on this... nobody cares about your money than you do.
bundle - good point if you want to do all the work yourself. I am willing to pay top dollar for services vs. spending hours myself trying to do it. And it doesn't hurt to have another set of professional eyes review your analysis. However, I would not call managing money a specialized business. I guess it depends on your definition of managing money, but there are a lot of 'money managers' out there.
doz - very good points. If you want to do all the legwork consistently, yes you can save a few bucks. And you are correct, if just managing for some friends, my analysis is overkill. I was working under the assumption the poster was going to do this as a serious business, but I should not have assumed.